In light of the federal government shutdown effective at midnight on October 1, the Division of Local Government Services (DLGS) issued a reminder that municipalities have the ability to extend a property tax grace period in certain circumstances.
A municipality may adopt a resolution offering an extended property tax grace period to eligible federal employees and federal contractors under certain circumstances applicable to a property taxpayer (or their spouse/civil union partner/domestic partner) who is either:
- An employee of a federal government agency who is furloughed because of a shutdown, and
- receives unemployment benefits during the shutdown, or
- who works during a shutdown but is not paid because of the shutdown; or
- A contractor whose pay is received through a contract with a federal government agency but whose payment is delayed or diminished because of a shutdown, provided that the contractor receives unemployment benefits during the shutdown.
On or before the date of the next property tax installment payment, a municipality may adopt a resolution extending the grace period for qualifying individuals. For example, for a November 1 property tax due date, the grace period would extend to February 1. However, a municipality can only apply the extended grace period if the federal shutdown is greater than 21 days in duration and the shutdown either remains in effect as of the property tax due date or concludes less than 14 days prior to the property tax due date. This grace period only applies to property taxes and not to local assessments or other municipal charges.
Upon adoption of the governing body resolution, the municipal clerk shall forward the resolution no later than three business days to DLGS at dlgs@dca.nj.gov with the subject titled “Property Tax Grace Period – Federal Shutdown.” If the municipality is under State Supervision or is receiving Transitional Aid, the DLGS Director must give prior approval before it can become effective.
Local Finance Notice 2020-25 (Pages 8-9) provides further details on necessary taxpayer documentation for eligibility.
Contact: Erin Knoedler, Legislative Analyst, eknoedler@njlm.org, 609-695-3481, x116.